Engineering group Cobham has said a revival in the civil aviation market had helped drive an 8.6 per cent rise in annual pre-tax profits.

The Dorset-based company, which is working alongside Rolls-Royce on the £13 billion airtanker contract for the RAF, said commercial airline traffic in 2004 had returned to levels seen in 2000, with a further increase expected this year.

The recovery helped Cobham boost underlying profits in the year to December 31 to £ 146 . 9 million from £135.3 million in 2003.

The group's order intake in 2004 rose 14.9 per cent to a record £1.06 billion against £925 million the year before, while revenues increased by 18.1 per cent to £983 million.

Cobham supplies equipment to the aerospace, defence, US national security, communications and search and rescue markets.

It said the "strong" results had come in the face of a difficult year for its aerospace systems business and a negative impact on profit growth from the weak US dollar.

Operating profits in aerospace systems fell six per cent due to the costs of developing the A380 super-jumbo, startup losses in its US countermeasures business, lower revenues from Eurofighter Typhoon production, US exchange rates and restructuring costs.

Cobham said the aerospace and defence market had continued to develop and grow in 2004 and it had supplemented its organic growth with six acquisitions worth £61 million.

The company said last month that it was considering shutting or selling its US anti-missile flares business after losing a $38 million (£20.1 million) contract to a rival.